June 19, 2024
Tesla Motors CEO Elon Musk has been accused of insider trading in a lawsuit by a Tesla Shareholder in the Delaware Chancery Court.
This case has been filed by shareholder Michael Perry, who accused Musk of trading more than $7. 5 billion in Tesla’s shares early last year, before the quarterly production and delivery reports, which showed less-than-expected numbers.
In the case against Musk, the plaintiff alleges that while real-time data was available, Musk learned that the figures were lower than what had been projected in mid-November 2022, and he sold his shares.
After Tesla revealed its fourth-quarter numbers, which put the production and delivery volumes slightly lower than expected on January 2, 2023, Tesla’s stock went down.
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It accuses Musk of having reaped unfair profits of approximately $3 billion, which he would have been unable to make had he waited to sell his shares once the information reached the public domain.
It also seeks to hold Tesla’s directors accountable for a breach of their fiduciary duties by permitting Musk to affect the sales. This legal proceeding is a new problem for Musk; others include a proxy fight over a $56 billion pay deal and investigating his purchase of Twitter, rechristened as X.
Musk and Tesla have not replied to a request for a comment on the lawsuit and its allegations. It is the most recent among the legal cases regarding Musk and his companies and their involvement in alleged securities fraud related to insider trading.
